U.S. drone operator SkyPan to pay $200,000 for unauthorized flights

WASHINGTON (Reuters) - A Chicago-based drone operator has agreed to pay $200,000 to settle allegations it illegally flew unmanned aircraft in congested airspace there and over New York City, federal officials said on Tuesday.

The U.S. Federal Aviation Administration (FAA) had proposed fining SkyPan International Inc $1.9 million in October 2015. Under the settlement, SkyPan will pay a further $150,000 if it violates FAA rules over the next year, the FAA said in a statement.

SkyPan, which said its hundreds of commercial clients include large real estate developers, said it was pleased to have resolved the issue, but that it was neither admitting nor contesting the allegations.

The company said in a statement that it has never had an accident, and that the flights took place two years before the FAA's first rule for commercial drone operations went into effect in August 2016.

According to the FAA, SkyPan operated drone flights to conduct aerial photography in New York and Chicago between March 2012 and December 2014 using aircraft lacking the required two-way radio, transponder, and altitude-reporting equipment.

The company will work with the FAA to release three public service announcements in the next 12 months that encourage drone operators to learn and follow U.S. rules, the FAA said.